Huisman Designs Green Offshore Drilling Rig of Tomorrow

When asked about what spurred Huisman to come up with the design, Dieter reminds that this is not the first time the company is designing an offshore rig that produces less emissions compared to conventional peers.

“In the past, we have built also what they call the greenest drillships in the world, the Noble Globetrotter I and II,” which, he says, emit only 45% of the emissions of a typical drillship.

The two drillships, built in 2012 and 2013 respectively, and owned by Noble Corp., are still active. They are operating for Shell in the U.S. Gulf of Mexico, and have recently secured contract extensions with the oil major. Globetrotter I secured a dayrate of $390,000, with Globetrotter II securing $398,500 dayrate.

Back to Huisman’s green semi-sub design, Wijning first explains where Huisman, which builds equipment for both oil and gas, and offshore wind, stands when it comes to the future energy mix.

“We actually fully acknowledge that we have to go to renewable energy, but we also know that this will take for a long, long time. So, we see that fossil fuels will be part of the energy mix for quite some time to go.”

But he also says that Huisman has a ‘rock solid belief’ that “we have to produce and consume these fossil fuels in the greenest way possible, and this is why the company decided to design ”the greenest rig possible.” The rig design is currently targeted for eventual deployment in the wider North Sea region.

“Currently, we see that for Western Europe gas from the North Sea is the cleanest fossil fuel which is out there. And we also see that the current rigs out there emit around 45,000 to 50,000 tons of CO2 per year, and I think we can do something serious about that, that has to be lower. So that's why we started this whole path for the green Harsh Environment Rig.”

40% fewer people on board

As mentioned before, Huisman promised a 40% reduction in onboard personnel with the new rig design.

How does one achieve this?

Wijning explains: “Well, first of all, the drill floor is completely unmanned. So, for example, stand building and pipe handling on the deck as well is done completely robotic and fully hands off.

“Tubulars will arrive on the rig in boxes and no personnel will touch these tubulars from arrival up to running into the hole itself. Therefore, you have much less people on the drill floor and on the pipe deck.”

According to Wijning, the rig will have a central operating room where personnel can control the complete rig with fewer people.

Also, the maintenance and change out operations are planned to be completely done out of the critical path and in many cases even onshore.

“So, you ship pieces of equipment onshore, do the maintenance out there and then refit it on the rig,” Wijning explains.

After thorough evaluation of POB requirements, Huisman found it could reduce the number of people on board by 40% to 50% compared to currently available rigs.

“Basically, we came to the conclusion that we can do with about 70 people on board instead of, say, 120 to 140,” Wijning says.

Fewer Days Per Well, Lower Costs Per Project

Huisman also promised 25% lower cost per well compared to existing harsh environment semi-subs.

“Both lower costs and lower emissions start with less days per well. So, we designed the various pieces of equipment with reduced invisible lost time as a goal.

“We do not need to slip and cut the drill line, we do not need to exchange the inserts of the slips and of the elevators, and therefore you can run the complete drill string from top to bottom with bottom hole assemblies and everything without any exchange and any removal of the power slips.”

“Further, we also have the drill floor completely flush with the main deck and therefore mobilizing of equipment is much, much easier, and therefore saving time, and therefore saving costs as well.

Wijning says that the design includes a heave compensated drill floor, which enables the drill string to be completely standing still relative to the seabed and to the hole.

“This ensures that the drill string, the casing string, or also the completion string is stationary in the well, and therefore you can work with worse weather conditions and you have less waiting on weather days, all in all, saving days, and therefore also saving costs,” Wijning explains.

Hydro, Wind, and… Nuclear?

While fewer days per well drive down emissions, this is not the main factor leading to the Huisman rig being green.

Namely, the plan is for the rig to be powered by onshore-produced hydroelectricity (available in Norway), via a power cable from a nearby platform. Alternatively, it can be powered by two floating wind turbines, moored next to the rig, which, the company says, could lead to up to 86% percent emission reduction in total.

This doesn’t mean that the rig won’t be able to operate without hydropower or floating wind, as diesel engines will still be there for these instances. as mentioned before, reducing emissions start with reducing the number of days per well, and this is proven by comparing the green rig for the future with the current state-of-the-art rigs. So, we've done a complete drilling well on paper and we saw that we could reduce the time per well with about 18% to 20%. That's already part of that gain.

Wijning explains in more detail: ”We have a zero energy active heave compensation system on it. We have a lower wind area, fewer people leadingto less hotel loads, and therefore, the energy consumption per day is less. So that combined with the less days when we are running on diesel, the rig emits around 40% to 45% less than its competition. But when running on external power (Hydro, Wind .OE) we can reduce the emissions up to 85% to 90%. So it depends on the case, when we can receive external power, then we can go up to the 86%.

What is more, Huisman has been thinking about nuclear powered rigs, but, Wijning says, we feel that's a little bit too early, so we haven't included that one yet.

Still, when asked when he could see nuclear powered rigs becoming feasible, he said 10 years from now could be possible.

“I know that here in the Netherlands we are investigating nuclear power for vessels and of course it's not new. I mean, the naval has done it for years and years, and in the past, also commercial vessels have been deploying nuclear power. So I think this will be coming back for sure,” Wijning says.

Chicken & Egg

“When will the Huisman Green Rig design become an actual, tangible rig? What do the drillers say?,” we asked Wijning.

He says: “Well, everybody is very enthusiastic about the design and its capabilities. However, we are dealing with the chicken and the egg situation here. Contractors focus on their own fleets and will only consider new builds when a sufficient long-term contract is basically handed out by an operator.

“Operators on the other hand, will be very happy to contract a rig when she's available. But yeah, she will only be available when a contractor will build it. So that's the chicken and the egg situation. But we do see definitely that in certain areas the drilling market is tightening, and we see some new build (orders) appearing on the horizon.”

To back up this claim of newbuilds on the horizon Wijning says: ”We see that the ambitions for emission reduction are rising significantly. For example, an operator wants to reduce the emissions of their contracted fleet by 50% by 2030, and 2030 is approaching very fast.”

And, according to Wijning, without bold actions, it is simply impossible to reach this emission reduction target by 2030.

How much will it cost to build?

It’s been a while since anyone ordered a newbuild HE semi-submersible drilling rig. For reference, Awilco Drilling ordered two from Keppel in 2018 and 2019, respectively, for $425 million each. These have yet to be delivered as the contracts have since been cancelled leading to the two parties to seek dispute resolution through arbitration. More Here: https://bit.ly/3GfqND5

Back to the Huisman rig. Once that moment comes, and a drilling contractor orders a Huisman green harsh-environment semi-submersible drilling rig, what can they expect when it comes to the construction costs?

Wijning explains: ”Well, I cannot mention numbers here, but I can say that we estimate the cost for the whole unit to be similar as to a new built traditional design.”

He explains that while the technology on Huisman’s rig might add up to the cost, overall, the rig is smaller, which is then reducing the costs.

“So basically, we think that in the end, CapEx will be more or less the same, but also said before, it's not only about the CapEx, of course, that's counting in day rate, but also the time per well is a significant amount in the overall savings.”

He also says that, for example, fuel consumption, and also taxes on carbon emissions, are also taking part when it comes to lowering the operational costs.

Robots taking our jobs? Not exactly.

We reminded Wijning that OPEX will also be lowered by having to pay fewer salaries, as there will be fewer people onboard. Are robots coming for our jobs?

He replies: ”Looking at personnel, you see on all sides the scarcity of personnel in the drilling industry. So needing less personnel, I think it's a big deal simply because the personnel is not there anymore.

Wijning points out a trend within the offshore drilling sector where many of the offshore drilling workers are retiring, or switching to the renewable energy sector, while at the same time one can say that the interest of the younger generation to join the drilling industry right now is not on high levels.

A 2017 survey by EY, found that 62% of Generation Z respondents considered a career in oil and gas “unappealing”, and 39% ranked it as “very unappealing,” compared with only 4% of young respondents who said it was “very appealing.”